Good afternoon and welcome to Pandora’s fourth quarter and full fiscal 2012 financial results call for the quarter ended January 31, 2012. Some of our discussions will contain forward looking statements which may include projected financial results or operating metrics, business strategies, anticipated future products or services, anticipated market demand or opportunities, and other forward-looking topics.

These statements are subject to risks, uncertainties, and assumptions. Accordingly, actual results could differ materially. For a listing of our risks that could cause our results to differ from today’s discussion, please refer to the documents we filed with the Securities and Exchange Commission.

I would also like to remind you that during the course of this call, we may discuss non-GAAP measures of our performance. Reconciliations to the most directly comparable GAAP financial measures are provided in the tables in the press release and form 8-K filed this afternoon with the SEC.

Today’s call is available via webcast, and a replay will be available following the conclusion of the call for two weeks. To access the press release, supplemental financial information, or the webcast replay, please consult our investor relations section of Pandora.com.

With that, let me turn the call over to Joe Kennedy, Pandora’s chairman and CEO.

Joe Kennedy

Thanks Dom. Fiscal 2012 was an extraordinary year for Pandora. We made great progress against our mission to redefine and disrupt radio, one of the largest consumer media categories, and where 80% of all music listening occurs.

Our purpose is simple: To enrich people’s lives by enabling them to enjoy music they know and discover new music that they’ll love. We do that by providing the best personalized radio experience in the world.

Our strong growth, both for the quarter and for the full year is evidence that our purpose-driven mission is working, and that Pandora is the future of radio. We continue to experience extraordinary growth in usage. Our audience continues to grow and the amount of time each listener spends with us each month also continues to grow.

Total listener hours reached a record 8.2 billion during fiscal 2012, up 109% year on year over the 3.8 billion in fiscal 2011. For the fourth quarter, our listener hours grew 99% year over year, to a record 2.7 billion, up from 1.3 billion in the same period last year. We also ended the year with 47 million active registered listeners, a new record, up 62% from the 29 million active users during the same period last year.

This remarkable growth triggered market share gains across the board. Our share of total radio listening in the U.S. increased to a record 5.55% in the fourth quarter of fiscal ’12, more than double the 2.71% level we saw in the fourth quarter of fiscal ’11. And our share of listening to the top 20 internet radio services in the U.S., according to Trident Digital, increased to a record 69.8% at the end of fiscal ’12, up from 58.3% at the end of fiscal ’11.

The expansion in our market share during fiscal year ’12 is particularly noteworthy in light of the fact that there were a wide variety of digital music initiatives launched by other companies over the course of the year. Consumers are voting with their listening hours and two things are clear. First, we are truly delivering the best personalized radio experience in the world, and second, our market leadership position is both strong and defensible.

Our expanding market share and strong user base are the driving forces behind our revenue growth. For the full year fiscal 12, total revenue grew 99% to $274.3 million, with ad revenue growing 101% to $240 million. For the fourth quarter, total revenue grew 71% to $81.3 million, with ad revenue growing 74% to $72.1 million.

We are very pleased with the full year revenue results, which significantly exceeded the targets we had established at the beginning of the year. Nearly doubling revenue at the scale at which we operate requirements both strategic and operational excellence.

While the 71% year over year revenue growth in Q4 was consistent with our guidance, fourth quarter ad spending was a bit weaker than our expectations, driven by two factors. First, holiday ad spending came in a few percent lower than expected, and second the ECPMs we saw on the remnant ad inventory we sold through third-party networks in January were lower than what we had modeled.

Given that January is a strong month for Pandora usage, but the weakest month of the year in terms of consumer-related ad spending, our premium sell-through rate is at its seasonal low point in January, and so we move a greater portion of our ad inventory through third-party networks than at any other time of the year.

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